Michigan Deposit Refunds by Direct Deposit: The 2026 Change
MCL 554.609 was amended by 2026 PA 102; the History line reads Am. 2026, Act 102, Imd. Eff. Sept. 21, 2026. New subsection (3) says a Michigan landlord who sends the difference owed to the tenant by direct deposit or electronic transfer instead of a check or money order must deposit it within 10 days after mailing the notice of damages. Several practical questions are not answered by the text; we list them for an attorney below.
What subsection (3) says
Subsection (2) describes the default: the notice of damages “must be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord.” It opens with “Except as otherwise provided in subsection (3).”
Subsection (3) is worded as a bar rather than a grant. Beginning on the effective date of the amendatory act that added it, a notice of damages “may not be accompanied by a check or money order” if the landlord transmits the difference through direct deposit or electronic transfer to either of these destinations:
- a bank account;
- an internet or mobile payment account or application.
The landlord “must deposit the amount determined in accordance with subsection (2) into the tenant’s account in a financial institution or internet or mobile payment account or application within 10 days after mailing the notice of damages.” The subsection does not name a date; it points to the amendatory act, and the History line supplies 21 September 2026.
What else the section requires
The History line says only that the section was amended; it does not say what changed. Subsection (3) refers to the amendatory act that added it. The list below is what the section reads now; the files do not show which of it is older.
- The notice is still mailed, within 30 days. Under MCL 554.609(1) the landlord “shall mail” an itemized notice, with the estimated cost of repair of each damaged item and the amounts and bases. Only the money may go electronically.
- The amount. The difference between damages claimed and the deposit held, and no damages claimed on a previous termination inventory checklist (subsection (2)).
- The boldface sentence. Subsection (4) requires, in 12 point boldface type at least 4 points larger than the body: “You must respond to this notice by mail within 7 days after receipt of the notice of damages, otherwise you will forfeit the amount claimed for damages.”
- The consequences. A missed 30-day notice triggers MCL 554.610 (full deposit remitted immediately). The 45-day suit-or-return rule and double-damages clause in MCL 554.613 show no 2026 amendment in their History lines, and neither does 554.610. The tenant’s reply goes by ordinary mail within 7 days under MCL 554.612.
A worked timeline
Assumptions (ours): occupancy ends Monday, 2 November 2026, counted as day 0; deposit $1,500; claimed damages $600; difference $900. The 10 days run from the mailing date, not from the 30-day deadline.
| Landlord mails notice | Transfer must be in the tenant’s account by |
|---|---|
| Fri 20 Nov 2026 (day 18) | Mon 30 Nov 2026 (day 28) |
| Tue 1 Dec 2026 (day 29) | Fri 11 Dec 2026 (day 39) |
The last day to mail the notice is Wed 2 Dec 2026 (day 30), and day 45 for suing or returning the balance is Thu 17 Dec 2026. Mailing late in the 30-day window can push the 10-day mark onto a weekend. The statute text does not say how to count weekends or holidays; the court rules do, and they are outside these files; ask the court clerk or an attorney, and when in doubt finish early.
What the text does not answer: questions for an attorney
- How does a landlord get the tenant’s account details? The text is silent. The forwarding-address duty in MCL 554.611 speaks only of “an address at which communications pursuant to this act may be received.”
- Is the tenant’s consent required? Subsection (3) contains no consent language, and says nothing about a tenant who prefers a check.
- What is an internet or mobile payment account or application? The text defines no such term.
- What if the 10 days are missed, or the transfer fails or is returned? Subsection (3) states no consequence and does not say when a deposit counts as made. How it interacts with 554.610 and 554.613(2) is a question for counsel.
- Does it apply when the occupancy ended before 21 September 2026? The text refers to the effective date but does not say whether the occupancy end date or the mailing date controls.
Common mistakes
- Emailing the notice instead of mailing it. Subsection (1) says mail.
- Sending the electronic transfer and also enclosing a check. Under subsection (3) the notice may not be accompanied by a check when the landlord uses direct deposit or electronic transfer.
- Counting the 10 days from move-out or from the 30-day deadline instead of from mailing.
- Dropping the subsection (4) boldface sentence from the notice.
- Treating the new option as a way around the 30-day or 45-day deadlines. Nothing in the text does that.
Checked against the text published on legislature.mi.gov on 5 October 2026. This is information about the statute, not legal advice.
Sources
- MCL 554.609 — Michigan Legislature, Michigan Compiled Laws
- MCL 554.610 — Michigan Legislature, Michigan Compiled Laws
- MCL 554.611 — Michigan Legislature, Michigan Compiled Laws
- MCL 554.612 — Michigan Legislature, Michigan Compiled Laws
- MCL 554.613 — Michigan Legislature, Michigan Compiled Laws
Related guides
- Michigan Security Deposit: The 30-Day Notice of Damages
- Michigan Security Deposit Maximum: 1 1/2 Months' Rent
- Michigan Security Deposit Written Notice: 14-Day Rule, MCL 554.603
- Michigan Landlord Inventory Checklist Requirements (MCL 554.608)
- Michigan 45-Day Deposit Rule: Sue or Return, and Double Damages
- Michigan 7-Day Demand for Possession for Unpaid Rent
- Michigan Month-to-Month Notice to Quit: MCL 554.134 Explained
- Michigan Eviction Process: Summary Proceedings, Step by Step
- Michigan Landlord Lockout and Utility Shutoff: MCL 600.2918
- Michigan Lease Clauses Landlords Cannot Use (Truth in Renting)
- Michigan Source-of-Income Law and the 5-Unit Exemption
Informational only, not legal advice. Statute text checked against the Michigan Compiled Laws (MCL 554.131 to 554.139, 554.601 to 554.616, 554.631 to 554.641 and 600.2918, 600.5701 to 600.5759) as published at legislature.mi.gov on October 5, 2026. Statutes change and a court may read them differently than a summary does; for a dispute, an eviction or anything expensive to get wrong, talk to a Michigan landlord-tenant attorney.
Want the complete picture? The Michigan Small Landlord Compliance Guide puts the security deposit, lease, notice and eviction rules of the Michigan Compiled Laws in one place, with each rule cited to the statute text.
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